suppose a person who buys only wine and cheese is given $1,000 in food stamps to...
suppose a person who buys only wine and cheese is given $1,000 in food stamps to supplement his $1,000 income. The food stamps cannot be used to buy wine. Might the consumer be better off with $2,000 in income? Explain in words and with a diagram.
Homework Answers
As we can see, the consumer
prefers the income of 2000 instead of income and 1000 and a food
stamp of 1000.
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suppose a person who
buys only wine and cheese is given $1,000 in food stamps to...
Q11. Consider a family with a cash income of $1,000 per month. With food on the...
Q11. Consider a family with a cash income of $1,000 per month. With food on the horizontal axis and income on the vertical axis, and assuming the price of food is $1: (a) Illustrate the equilibrium of a family who spends 60% of their income on food. (b) Suppose now this family is eligible for food stamps: It pays $200 per month to obtain $600 worth of food. Draw this family's new budget constraint. (c) Illustrate the family’s new equilibrium...
agetline between (5) Suppose the Federal Government decides to provide assistance to the poor in your...
agetline between (5) Suppose the Federal Government decides to provide assistance to the poor in your city. It issues $200 worth of food stamps to such individuals. The food stamps are coupons that can be exchanged for $200 worth of food at the grocery store and they can be used only by the person to whom they are issued Dew your budgetline between "food" and all other goods" both before and after the food stamps are issued. Assume the price...
Suppose Cole buys food (X) and clothing (Y) with his income of $500 per month. The prices that Co...
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A consumer has an income of $1,000 to spend on food and medicine. The price of...
A consumer has an income of $1,000 to spend on food and medicine. The price of one unit of food is $5 and the price of one unit of medicine is $10. For each question, write down the mathematical expression of the budget constraint and draw it carefully. Put food on the x-axis and medicine on the y-axis. Label the incercepts, slopes, and kinks. 1. Suppose the consumer receives coupons for 50 units of food and those can only be...
2. Suppose there are only two goods: bread (G) and wine (G2). In 2006, the consumer...
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9 kmlv.github.io Question 2: A consumer has an income of $1,000 to spend on food and...
9 kmlv.github.io Question 2: A consumer has an income of $1,000 to spend on food and medicine. The price of one unit of food is $5 and the price of one unit of medicine is $10. For each question, write down the mathematical expression of the budget constraint and draw it carefully. Put food on the x-axis and medicine on the y-axis. Label the incercepts,slopes, and kinks. 1. Suppose the consumer receives coupons for 50 units of food and those...
1. Bobby is a college student who has €500 of income to spend each semester on...
1. Bobby is a college student who has €500 of income to spend each semester on books and pizzas. The price of a pizza is €10 and the price of a book is є50. Suppose he consumes 20 pizzas. (a) Assuming that Bobby wants to maximie utility, draw Bobby's budget constraint and indifference curve. (b) Now, suppose Bobby's parents buy him a €300 gift certificate each semester that can only be used to buy You can assume that his indifference...
Question 1: Robert and Erin are trapped on a deserted island with only two goods: Wine...
Question 1: Robert and Erin are trapped on a deserted island with only two goods: Wine (W) and Crackers (C). Robert currently has 6 bottles of wine and 9 boxes crackers whereas Erin has 9 bottles of wine and 6 boxes of crackers. Robert's preferences are represented by his utility function UR = W0.6C0.4 and Erin's by UE = W0.400.6. (a) Calculate MRSWc for both Robert and Erin. Are they the same or different given their endowments of W and...
1,2,3 ECON 101: Principles of Microeconomics - Discussion Section Week 10 TA: Kanit Kuevibulvanich Important Concepts...
1,2,3
ECON 101: Principles of Microeconomics - Discussion Section Week 10 TA: Kanit Kuevibulvanich Important Concepts • Income and Substitution Effect - Production and Cost Problems 1. A consumer has income of $3,000. Wine costs $3 per glass, and cheese costs $6 per pound. a. Draw the consumer's budget constraint (put cheese on the horizontal axis). What is the slope of this budget constraint? b. Suppose his income increases from $3,000 to $4,000. Show what happens if both wine and...
2) Consider a location model of differentiated products where the set of possible products is the...
2) Consider a location model of differentiated products where the set of possible products is the line segment [0,11 and consumers are uniformly distributed along the line segment. Transportation costs in this model are equal to td, where d= |x- is the distance between the consumer's ideal variety and the variety she purchases. If a consumer with ideal variety x* purchases variety x at price p, then her utility is If the consumer does not purchase the good her utility...
agetline between (5) Suppose the Federal Government decides to provide assistance to the poor in your city. It issues $200 worth of food stamps to such individuals. The food stamps are coupons that can be exchanged for $200 worth of food at the grocery store and they can be used only by the person to whom they are issued Dew your budgetline between "food" and all other goods" both before and after the food stamps are issued. Assume the price...
A consumer has an income of $1,000 to spend on food and medicine. The price of one unit of food is $5 and the price of one unit of medicine is $10. For each question, write down the mathematical expression of the budget constraint and draw it carefully. Put food on the x-axis and medicine on the y-axis. Label the incercepts, slopes, and kinks. 1. Suppose the consumer receives coupons for 50 units of food and those can only be...
2. Suppose there are only two goods: bread (G) and wine (G2). In 2006, the consumer had an income of $100. In 2007, the consumer again has an income of S100, but the absolute prices of bread and wine have risen. The consumer's budget lines and his optima for two years are shown in the diagram below. wine 50 20 2006 bread 25 40 (1) Use the above information, calculate the absolute prices of bread and wine for the years...
9 kmlv.github.io Question 2: A consumer has an income of $1,000 to spend on food and medicine. The price of one unit of food is $5 and the price of one unit of medicine is $10. For each question, write down the mathematical expression of the budget constraint and draw it carefully. Put food on the x-axis and medicine on the y-axis. Label the incercepts,slopes, and kinks. 1. Suppose the consumer receives coupons for 50 units of food and those...
1. Bobby is a college student who has €500 of income to spend each semester on books and pizzas. The price of a pizza is €10 and the price of a book is є50. Suppose he consumes 20 pizzas. (a) Assuming that Bobby wants to maximie utility, draw Bobby's budget constraint and indifference curve. (b) Now, suppose Bobby's parents buy him a €300 gift certificate each semester that can only be used to buy You can assume that his indifference...
Question 1: Robert and Erin are trapped on a deserted island with only two goods: Wine (W) and Crackers (C). Robert currently has 6 bottles of wine and 9 boxes crackers whereas Erin has 9 bottles of wine and 6 boxes of crackers. Robert's preferences are represented by his utility function UR = W0.6C0.4 and Erin's by UE = W0.400.6. (a) Calculate MRSWc for both Robert and Erin. Are they the same or different given their endowments of W and...
1,2,3
ECON 101: Principles of Microeconomics - Discussion Section Week 10 TA: Kanit Kuevibulvanich Important Concepts • Income and Substitution Effect - Production and Cost Problems 1. A consumer has income of $3,000. Wine costs $3 per glass, and cheese costs $6 per pound. a. Draw the consumer's budget constraint (put cheese on the horizontal axis). What is the slope of this budget constraint? b. Suppose his income increases from $3,000 to $4,000. Show what happens if both wine and...
2) Consider a location model of differentiated products where the set of possible products is the line segment [0,11 and consumers are uniformly distributed along the line segment. Transportation costs in this model are equal to td, where d= |x- is the distance between the consumer's ideal variety and the variety she purchases. If a consumer with ideal variety x* purchases variety x at price p, then her utility is If the consumer does not purchase the good her utility...
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